MA2 Exam Jan13main solution PDF

Preview

Summary

exam solutions...

Description

Main sit outline solutions Q1.

Budgeted Sales = (5000 x £20) + (2000 x £35) = £170000 DM = (5000 X 2kgs) + (2000 x 5kgs) = 20000kgs X £2 = £40000 DL = (5000 X 0.25) + (2000 X 0.5) = 2250 hrs X £8 = £18000 VO = 2250 hrs x £12 = £27000 FO = 2250 hrs x £24 = £54000 FB Sales = (4800 x £20) + (2500 x £35) = £183500

FB DM (4800 X 2kgs) + (2500 x 5kgs) = 22100kgs x £2 = £44200 FB DL = (4800 X 0.25) + (2500 X 0.5) = 2450 hrs X £8 = £19600 FB VO = 2450hrs x £12 = £29400 FB FO = 2450hrs x £24 = £58800 Actual Sales = (4800 x £18.5) + (2500 X £37) = £181300

Standard Mix Calculation: Total Sales Unit Forecast = 7000 units BC 5000/7000 = 71.43% FC 2000/7000 = 28.45% Actual Sales = 7300 BC = 71.43% OF 7300 = 5214 X £5 (STANDARD PROFIT SEE COST CARD) FC = 28.57% OF 7300 = 2086 X £3 (SEE STANDARD COST CARD FOR STANDARD PROFIT) TOTAL = £32328

Q2

B) This approach to pricing is not sustainable. Fixed costs must be covered by applying a covering charge for Administration and other costs such as depreciation otherwise net operational losses will occur. The business must also apply a profit mark-up or margin to generate its profit. This is a short term or one off approach only to attract customers- not viable in medium to long term. C) Discussion of interests and reactions of stakeholders, including: customers, suppliers, competitors, the business’s owners, employees. Customers and competitors may offer the best points for discussion. 1 mark per relevant point. Q3. A)

X 100

∑

Y 3195

XY 53430

X(squared) 1686

Y(squared) 1703925

n=6

n ∑ xy − ∑ x ∑ y n ∑ x 2 − (∑ x)2

b (the variable cost per unit) =

= (6 x 53430) – (100 x 3195)/(6 x 1686) – (100 x 100) = £9.31

a (the fixed costs) =

y− bx

= 3195/6 – 9.31 x (100/6) = 377.33 Y = bx + a = 9.31x + 377.33

n ∑ xy − ∑ x ∑ y

Correlation coefficient = r =

√ (n ∑ x − (∑ x ) ) ( n ∑ y − (∑ y ) ) 2

2

2

2

= (6 x 53430) – (100 x 3195)/√((6 x 1686) – (100 x 100)) x( (6 x 1703925) – (3195 x 3195)) r = 0.8048

B)

iv) Profit X = 0, Y= 1800 = 1800 X £20 (CONTRIBUTION PER UNIT OF MP) = £36000 Profit X = 3000, Y = 0 = 3000 X £30(CONTRIBUTION PER UNIT OFGER) = £90000

Q4. A)

Total Lab Hrs = (35,000 x 5) + (35000 x 4) + (35000 x 6) = 525000 Total Mc Hrs = (35000 x 3) = (35000 x 3) + (35000 x 5) = 385000 AT PO = 355.56 X 3400/35000 units = £34.54 Set Up = 955.88 x 560/35000 units = £15.29 TC PO = 355.56 X 2600/35000 = £26.41 Set Up = 955.58 x 420/35000 = £11.47 GC

PO = 355.56 X 3000/35000 = £30.48 Set Up = 955.58 x 380/35000 = £10.38

B) This is an open question with students earning 1 mark per relevant point. Points that could be covered: ABM is ABC information used in a wider managerial sense Product mix decisions improved through more accurate product and service costs Understanding and improving business processes and activities Understanding costs of activities, processes and the cost driver (cause and effect) Identifying wasteful versus value adding activities Activity Based Budgeting and Value added analysis applications...